Government

Type: Parliamentary democracyConstitution: The People's Assembly approved an interim basic law on
April 29, 1991; a draft constitution was rejected by popular referendum
in the fall of 1994. A revised draft was subsequently approved in a
referendum on November 22, 1998.Independence: November 28, 1912 (from the Ottoman Empire).Branches: Executive -- President (head of state); Prime Minister (head
of government), Council of Ministers (cabinet). Legislative --
unicameral People's Assembly (parliament). Judicial -- Constitutional
Court, Court of Cassation, appeals courts, and district courts.Subdivisions: 36 Rreths (districts).Political parties: Socialist Party (PS); Democratic Party (PD);
Republican Party (PR); Unity for Human Rights Party (PBDNJ, Greek
minority party); Social Democratic Party (PSD); Democratic Alliance
Party (PAD); Legality Party (LLP, monarchist), Balli Kombetar (BK,
National Front); National Unity Party (PUK); National Unity Party
(PNU); Social Democratic Union Party (PBSD); Christian Democratic Party
(PCD); Democratic Party of the Right (PDD); Agrarian Party (PA); and up
to 20 other parties registered.Suffrage: Universal and compulsory at age 18.

PEOPLE AND HISTORY

The name Albania is derived from an ancient Illyrian tribe, the
Albanoi, forbears of the modern Albanians. The Albanian name for their
country is Shqiperia.

Prior to the 20th century, Albania was subject to foreign domination
except for a brief period (1443-1478) of revolt from Ottoman rule.
Albania declared its independence during the first Balkan War in 1912
and remained independent after the World War I largely through the
intercession of U.S. President Woodrow Wilson at the Paris peace
conference.

In 1939, Italy under Mussolini annexed Albania. Following Italy's 1943
surrender to Allied Powers during World War II, German troops occupied
the country. Partisan bands, including the communist-led National
Liberation Front (NLF), gained control in November 1944 following the
German withdrawal. Since Yugoslav communists were instrumental in
creating the Albanian communist Party of Labor in November 1941, the
NLF regime, led by Enver Hoxha, became a virtual satellite of
Yugoslavia until the Tito-Stalin split in 1948. Subsequently,
Albania's hard-line brand of communism led to growing difficulties with
the Soviet Union under Krushchev, coming to a head in 1961 when the
Soviet leaders openly denounced Albania at a party congress. The two
states broke diplomatic relations later that year. However, Albania
continued nominal membership in the Warsaw Pact until the 1968 invasion
of Czechoslovakia.

In 1945, an informal U.S. mission was sent to Albania to study the
possibility of establishing relations with the NLF regime. However,
the regime refused to recognize the validity of prewar treaties and
increasingly harassed the U.S. mission until it was withdrawn in
November 1946. The U.S. maintained no contact with the Albanian
Government between 1946 and 1990.

During the 1960s, China emerged as Albania's staunch ally and primary
source of economic and military assistance. However, the close
relationship faltered during the 1970s when China decided to introduce
some market reforms and seek a rapprochement with the U.S. After years
of rocky relations, the open split came in 1978 when the Chinese
Government ended its aid program and terminated all trade. Hoxha,
still communist dictator, opted to pursue an isolationist course. The
result was financial ruin for Albania.

By 1990, changes elsewhere in the communist bloc began to influence
thinking in Albania. The government began to seek closer ties with the
West in order to improve the economic conditions in the country. The
People's Assembly approved an interim basic law in April 1991. Short-
lived governments introduced initial democratic reforms throughout
1991. In 1992, the victorious Democratic Party government under
President Sali Berisha began a more deliberate program of market
economic and democratic reform. Progress stalled in 1995, however,
resulting in declining public confidence in government institutions and
an economic crisis spurred on by the proliferation and collapse of
several pyramid financial schemes. The implosion of authority in early
1997 alarmed the world and prompted intense international mediation and
pressure. Early elections held in June 1997 led to the victory of a
Socialist-led coalition of parties, which remains in power today.

GOVERNMENT AND POLITICAL CONDITIONS

Albania's 1976 socialist constitution was declared invalid in April
1991, and an interim basic law was adopted. The country remains
without a permanent constitution; a draft constitution was rejected in
a November 1994 referendum.

Principal Government Officials

President -- Rexhep MeidaniPrime Minister -- Pandeli MajkoForeign Minister -- Paskal MiloAmbassador to the United States -- Petrit BushatiAmbassador to the United Nations -- Agim Nesho

President and Cabinet

The Head of State in Albania is the President of the Republic. The
President is elected to a 5-year term by the People's Assembly by
secret ballot, requiring a two-thirds majority of the votes of all
deputies. The next election is expected in 2002.

The President has the power to guarantee observation of the
Constitution and all laws, act as Commander-in-Chief of the armed
forces; exercise the duties of the People's Assembly when the Assembly
is not in session, and appoint the Chairman of the Council of Ministers
(Prime Minister).

Executive power rests with the Council of Ministers (cabinet). The
Chairman of the Council (Prime Minister) is appointed by the President,
ministers are nominated by the President on the basis of the Prime
Minister's recommendation. The People's Assembly must give final
approval of the composition of the Council. The Council is responsible
for carrying out both foreign and domestic policies. It directs and
controls the activities of the ministries and other state organs.

The Council consists of 17 ministers and nine state secretaries. The
Socialist Party occupies the bulk of the cabinet positions, though the
Democratic Alliance, the Social Democratic Party, and the Agrarian
Party each head one ministry.

Legislature

The Kuvendi Popullor, or People's Assembly, is the law-making body of
the Albanian Government. There are 155 deputies in the Assembly, of
which 115 are directly elected by an absolute majority of the voters
and 40 are chosen by their parties on the basis of proportional
representation. The President of the Assembly (or Speaker) has two
deputies and chairs the Assembly. There are 15 permanent commissions,
or committees. Parliamentary elections are held at least every 4
years.

The parliament that emerged from elections in June 1997 was led by the
Socialist Party, which took 101 of the 155 seats. The Democratic Party
won 27 seats. The Social Democrats won eight seats (including the
Speaker's), and the Unity for Human Rights party won four. Among the
remaining seats, the Democratic Alliance, Republican, and Legality and
Unity of the Right parties won two each; Balli Kombetar, the Agrarian,
Christian Democrat, and National Unity Party won one each.

The Assembly has the power to decide the direction of domestic and
foreign policy; approve or amend the Constitution; declare war on
another state; ratify or annul international treaties; elect the
President of the Republic, the Supreme Court, the Attorney General and
his or her deputies; and control the activity of state radio and
television, state news agency and other official information media.

Judicial System

The court system consists of a Constitutional Court, the Court of
Cassation, appeals courts, and district courts. The Constitutional
Court is comprised of nine members appointed by the People's Assembly
for maximum 9-year terms. The Constitutional Court interprets the
Constitution, determines the constitutionality of laws, and resolves
disagreements between local and federal authorities. The remaining
courts are each divided into three jurisdictions: criminal, civil, and
military. The Court of Cassation is the highest court of appeal and
consists of 11 members appointed by the People's Assembly and serving
7-year terms. The President of the Republic chairs the High Council of
Justice (HCJ) charged with appointing and dismissing other judges. The
HCJ was expanded in late 1997 to comprise 13 members from among the
various branches of government.

A college of three judges renders Albanian court verdicts; there is no
jury trial, though the college is sometimes referred to in the Albanian
press as the "jury."

Administrative Divisions

Albania is divided into 12 prefectures. Prefects are appointed by the
Council of Ministers. Each prefecture comprises several districts
(Rreths), of which there are 36. Each district has its own local
administration and governor. District governors are elected by the
District Council, whose members are selected from party lists made
public to voters before local elections, on the basis of proportional
representation. City mayors are directly elected by voters, while city
councils are chosen by proportional representation.

Albania maintains an embassy in the United States at 2100 S Street NW,
Washington, DC 20008 (telephone: 202-223-4942; fax: 202-628-7342).

ECONOMY

The collapse of communism in Albania came later and was more chaotic
than in other eastern European countries and was marked by a mass
exodus of refugees to Italy and Greece in 1991 and 1992. Attempts at
reform began in earnest in early 1992 after real GDP fell by more than
50% from its peak in 1989.

The democratically elected government that assumed office in April 1992
launched an ambitious economic reform program to halt economic
deterioration and put the country on the path toward a market economy.
Key elements included price and exchange system liberalization, fiscal
consolidation, monetary restraint, and a firm income policy. These
were complemented by a comprehensive package of structural reforms
including privatization, enterprise, and financial sector reform, and
creation of the legal framework for a market economy and private sector
activity. Most prices were liberalized and are now at or near
international levels. Most agriculture, state housing, and small
industry were privatized. Progress continued in the privatization of
transport, services, and small and medium-sized enterprises. In 1995,
the government began privatizing large state enterprises.

Results of Albania's efforts were initially encouraging. Led by the
agricultural sector, real GDP grew by an estimated 11% in 1993, 8% in
1994, and more than 8% in 1995, with most of this growth in the private
sector. Annual inflation dropped from 250% in 1991 to single-digit
numbers. The Albanian currency, the lek, stabilized. Albania became
less dependent on food aid. The speed and vigor of private
entrepreneurial response to Albania's opening and liberalizing was
better than expected. Beginning in 1995, however, progress stalled,
with negligible GDP growth in 1996 and a 9% contraction in 1997.
Inflation approached 20% in 1996 and 50% in 1997. The lek initially
lost up to half of its value during the 1997 crisis, before rebounding
to its January 1998 level of 143 to the dollar.

Albania is currently undergoing an intensive macroeconomic
restructuring regime with the IMF and World Bank. The need for reform
is profound, encompassing all sectors of the economy. However, reforms
are constrained by limited administrative capacity and low-income
levels, which make the population particularly vulnerable to
unemployment, price fluctuation, and other variables that negatively
affect income. Albania is still dependent on foreign aid and
remittances from expatriates abroad. Large scale investment from
outside is still hampered by poor infrastructure, lack of a fully
functional banking system, untested or incompletely developed
investment, tax, and contract laws, and an enduring mentality that
discourages bureaucratic initiative.

FOREIGN RELATIONS

Albanian foreign policy has concentrated on maintaining good relations
with its Balkan neighbors, gaining access to European-Atlantic security
institutions, and securing close ties with the United States. The
crisis of 1997 spurred an intensive period of international involvement
in Albania, led by the Organization for Security and Cooperation in
Europe (OSCE). Italy hosted a series of international conferences and
led a multinational force of about 7,000 troops to help stabilize the
country and facilitate OSCE election monitoring. The United States has
worked closely with European partners and various multilateral fora to
ensure that international efforts are coordinated.

The Government of Albania is very concerned with developments in the
ethnic Albanian province of Kosovo in neighboring Serbia, particularly
in the post-Dayton agreement period. While maintaining a responsible
and non-provocative position, the Albanian Government has made it clear
that the status and treatment of the Albanian population in Kosovo is a
principal national concern. Bilateral relations with Greece have
improved dramatically since 1994. In 1996, the two countries signed a
Treaty of Peace and Friendship and discussed the issues of the status
of Albanian refugees in Greece and education in the mother tongue for
the ethnic Greek minority in southern Albania. Tirana's relations with
Macedonia remain friendly, despite occasional incidents involving
ethnic Albanians there. Tirana has repeatedly encouraged the Albanian
minority's continued participation in the government of F.Y.R.O.M.

Foreign Aid

Through FY 1998, the U.S. committed approximately $300 million to
Albania's economic and political transformation and to address
humanitarian needs. This figure comprises about 10% of all bilateral
and multilateral assistance offered since 1991. Italy ranks first in
bilateral assistance and Germany third. The EU has given about $800
million since 1991 and pledged $175 million in 1996-1999.

In FY 1999, the U.S. will provide $30 million through the Support for
East European Democracy (SEED) Act, up from $27 million the previous
year. The U.S. also will provide an agricultural commodities grant of
$10 million. The $30 million Albanian-American Enterprise Fund (AAEF),
launched in 1994, is actively making debt and equity investments in
local businesses. AAEF is designed to harness private sector efforts
to assist in the economic transformation. U.S. assistance priorities
include promotion of agricultural development and a market economy,
advancement of democratic institutions (including police training), and
improvements in quality of life. The SEED funding request for Albania
for FY 2000 is $25 million.

U.S.- ALBANIAN RELATIONS

The U.S. and Albania had no diplomatic relations between 1946 and 1991.
Following the Albanian Government's lifting in March 1991 of
restrictions on religious and political activity and on travel, the
U.S. reestablished diplomatic relations with Albania. The U.S. Embassy
in Tirana reopened October 1, 1991. Since 1991, the U.S. has
maintained close relations with a series of Albanian Governments. The
U.S. Government has provided more than $250 million in technical and
humanitarian assistance to support Albania's political and economic
development.

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides
Travel Warnings and Consular Information Sheets. Travel Warnings are
issued when the State Department recommends that Americans avoid travel
to a certain country. Consular Information Sheets exist for all
countries and include information on immigration practices, currency
regulations, health conditions, areas of instability, crime and
security, political disturbances, and the addresses of the U.S. posts
in the country. Public Announcements are issued as a means to
disseminate information quickly about terrorist threats and other
relatively short-term conditions overseas which pose significant risks
to the security of American travelers. Free copies of this information
are available by calling the Bureau of Consular Affairs at 202-647-5225
or via the fax-on-demand system: 202-647-3000. Travel Warnings and
Consular Information Sheets also are available on the Consular Affairs
Internet home page: http://travel.state.gov and the Consular Affairs
Bulletin Board (CABB). To access CABB, dial the modem number: 301-946-
4400 (it will accommodate up to 33,600 bps), set terminal
communications program to N-8-1(no parity, 8 bits, 1 stop bit); and
terminal emulation to VT100. The login is travel and the password is
info. (Note: Lower case is required). The CABB also carries
international security information from the Overseas Security Advisory
Council and Department's Bureau of Diplomatic Security. Consular
Affairs Trips for Travelers publication series, which contain
information on obtaining passports and planning a safe trip abroad, can
be purchased from the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone:
202-512-1800; fax 202-512-2250.

Passport Services information can be obtained by calling the 24-hour,
7-day a week automated system ($.35 per minute) or live operators 8
a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-
900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat
rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648).

Travelers can check the latest health information with the U.S. Centers
for Disease Control and Prevention in Atlanta, Georgia. A hotline at
877-FYI-TRIP (877-394-8747) and a web site at
http://www.cdc.gov/travel/index.htm give the most recent health
advisories, immunization recommendations or requirements, and advice on
food and drinking water safety for regions and countries. A booklet
entitled Health Information for International Travel (HHS publication
number CDC-95-8280) is available from the U.S. Government Printing
Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and
customs regulations, legal holidays, and other items of interest to
travelers also may be obtained before your departure from a country's
embassy and/or consulates in the U.S. (for this country, see
"Principal Government Officials" listing in this
publication).

U.S. citizens who are long-term visitors or traveling in dangerous
areas are encouraged to register at the U.S. embassy upon arrival in a
country (see "Principal U.S. Embassy Officials" listing in
this publication). This may help family members contact you in case of
an emergency.

Further Electronic Information

Department of State Foreign Affairs Network. Available on the Internet,
DOSFAN provides timely, global access to official U.S. foreign policy
information. Updated daily, DOSFAN includes Background Notes; Dispatch,
the official magazine of U.S. foreign policy; daily press briefings;
Country Commercial Guides; directories of key officers of foreign
service posts; etc. DOSFAN's World Wide Web site is at
http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual basis by
the U.S. Department of State, USFAC archives information on the
Department of State Foreign Affairs Network, and includes an array of
official foreign policy information from 1990 to the present. Contact
the Superintendent of Documents, U.S. Government Printing Office, P.O.
Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or
fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of
Commerce, the NTDB contains a wealth of trade-related information. It
is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the
NTDB Help-Line at (202) 482-1986 for more information.